P.C. Borooah, J.
1. One D. L. Sen, a shareholder of the petitioner Calcutta Landing & Shipping Co. Ltd. (hereinafter 'the company') sold 9 shares of the said Company to one Phani Bhusan Sarkar, who applied to the company for registration of the said shares and deposited the original share scrips for necessary registration. The Company did not register the transfer on the ground that the signature of the transferor on the transfer deed did not tally with the specimen signature of the transferor maintained by the Company and also because the Adhesive Stamp on the Transfer Deed was not cancelled. Phani Bhusan Sarkar preferred an appeal against the decision of the company Law Board under Section 111 of the Companies Act, 1956. After hearing the contention of the Company, the Company Law Board by an order dated June 18, 1979 accepted the company's contention but referred the matter to the Collector of Stamps, Calcutta for adjudication of duty, penalty etc. under the provisions of the Indian Stamp Act.
2. On January. 29, 1980 the company received a Notice bearing Memo No. 6 RS dated January 24, 1980 along with a copy of order dated July 17,1979 passed by the Collector of Calcutta to the effectthat the Company was directed to pay a penalty of Rs. 50/- under Section 63 of the Indian Stamp Act as the Company had failed to cancel the Adhesive Stamp as required under Rule 17 of the Indian Stamp Rules, 1925 read with Government of West Bengal Notification No. 6714 AST dated 18-7-1941. A copy of the order dated July 17, 1979, which is annexed to the petition and marked with the letter 'C', is the subject matter of challenge in this Rule.
3. I have heard Mr. Gautam Chakra-borty, appearing on behalf of the Company and Mr. Shyamal Sen, appearing on behalf of the respondents.
4. Section 12(1)(a) of the Stamp Act reads as follows :
'12 (1) (a). Whoever affixes any adhesive stamp to any instrument chargeable with duty which has been executed by any person shall, when affixing such stamp, cancel the same so that it cannot be used again;'
5. The Government of West Bengal Notification dated l8-7-1941 which amended Rule 17 of the Indian Stamp Rules, 1925 and which was referred to by the Collector in the impugned order reads as follows :--
' 'Share Transfer' stamps affixed to deeds of transfer of shares, shall, before effect is given to the transfer by the joint stock company concerned, be cancelled by the Company by means of a punch which can perforate either the word 'cancelled' or an abbreviation thereof, namely, 'canceled' or 'cancelled' or the initials of the company, in sufficient prominence to render the Stamps permanently unfit for reutilisation even though the stamps were previously cancelled in accordance with Section 12 of the Indian Stamp Act, 1899. In case a company fails so to cancel the share transfer stamps as provided by this Rule the Company shall be liable to the penalty prescribed by Section 63 of the Indian Stamp Act, 1899:'
6. Reading the aforesaid section of the Indian Stamp Act together with the Notification, it is clear that the initial cancellation of the adhesive stamp on the share transfer deed has to be done either by the transferor or the transferee before the transfer deed along with the share scrip is presented to the Company for registration of the transfer. After this is done, then the duty is cast on the Company under the aforesaid Notification to perforate the stamp which has alreadybeen cancelled. As the initial cancellation was not done in the instant case, the company rightly refused to register the shares and the Collector erred in holding that the Company had committed an of fence by not perforating the stamp in accordance with the aforesaid Notification.
7. In the circumstances, I make the Rule absolute and quash the impugned order dated 17-7-1979. There will be no order as to costs.